Natural Gas Weekly Fundamental Analysis October 8-12, 2012 Forecast

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Weekly Analysis and Recommendation:

Natural Gas remained strong, but could not hold onto last weeks gain. The commodity opened the week at 3.353 and surged to a high of 3.486 and then midweek broke above the 3.50 level before the EIA injection reports. Natural Gas added stocks this week but at a lower rate than expected.

Date

Last

Open

High

Low

Change %

Oct 05, 2012

3.387

3.408

3.436

3.337

-0.60%

Oct 04, 2012

3.408

3.407

3.462

3.368

0.04%

Oct 03, 2012

3.406

3.502

3.526

3.349

-2.73%

Oct 02, 2012

3.502

3.479

3.546

3.398

0.65%

Oct 01, 2012

3.479

3.353

3.486

3.349

3.79%

The number of rigs drilling for natural gas in the United States climbed this week for the second time in three weeks despite relatively low gas prices that continue to squeeze profit margins in most dry gas drilling operations. The tick up in rig numbers from a 13-year low reached last week may have been spurred by expectations of further gas price gains as the peak-demand winter heating season approaches, traders said. The gas-directed rig count rose this week by two to 437, data from Houston oil services firm Baker Hughes showed. It was only the eighth time this year that the gas rig count has gained. The count is still down 53 percent since peaking at 936 last October.

Traders have been looking for signs that low gas prices might finally slow record output, but production is still running about 3 bcf per day above the same time last year. There are concerns that if gas prices move much higher producers could opt to hook up wells that have been drilled but not flowing because gas prices below $3 were unattractive. The EIA expects marketed gas production in 2012 to hit a record for a second straight year, climbing 4 percent from 2011 levels to 68.86 bcf per day.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of October 1-5 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Oct. 01 

CHF

Retail Sales (YoY) 

5.9%

4.5%

2.9%

 

CHF

SVME PMI 

43.6

47.5

46.7

 

EUR

Italian Manufacturing PMI 

45.70

44.20

43.60

 

EUR

French Manufacturing PMI 

42.7

42.6

42.6

 

EUR

German Manufacturing PMI 

47.4

47.3

47.3

 

EUR

Manufacturing PMI 

46.1

46.0

46.0

 

GBP

Manufacturing PMI 

48.4

49.3

49.5

 

USD

ISM Manufacturing Index 

51.5

49.7

49.6

 Oct. 02

GBP

Nationwide HPI (MoM) 

-0.4%

-0.3%

1.1%

 

EUR

Spanish Unemployment Change 

79.60K

 

38.20K

 Oct. 03

GBP

Services PMI 

52.2

53.1

53.7

 

EUR

Retail Sales (MoM) 

0.1%

-0.1%

0.1%

 

USD

ADP Nonfarm Employment Change 

162K

143K

189K

 

USD

ISM Non-Manufacturing Index 

55.1

53.2

53.7

Oct. 04

GBP

Halifax House Price Index (MoM) 

-0.4%

0.2%

-0.4%

 

GBP

Interest Rate Decision 

0.50%

0.50%

0.50%

 

GBP

BOE QE Total 

375B

375B

375B

 

EUR

Interest Rate Decision 

0.75%

0.75%

0.75%

 

USD

Initial Jobless Claims 

367K

370K

363K

 

USD

Continuing Jobless Claims 

3281K

3271K

3281K

Oct. 05

EUR

GDP (QoQ) 

-0.2%

-0.2%

-0.2%

 

EUR

German Factory Orders (MoM) 

-1.3%

-0.5%

0.3%

 

USD

Average Hourly Earnings (MoM) 

0.3%

0.2%

0.0%

 

USD

Nonfarm Payrolls 

114K

113K

142K

 

USD

Average Weekly Hours 

34.5

34.4

34.4

 

USD

Private Nonfarm Payrolls 

104K

130K

97K

Historical: From 2010 to Present

Highest: 6.106 on Jan 07, 2010

Average: 3.836 over this period

Lowest: 1.903 on April 19, 2012

 

WEEKLY

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Forecast

Previous

Oct. 08 

08:15

CHF

CPI (MoM) 

0.3%

 

 

11:00

EUR

German Industrial Production (MoM) 

-0.9%

1.3%

Oct. 09

00:01

GBP

RICS House Price Balance 

-20%

-19%

 

09:30

GBP

Industrial Production (MoM) 

-0.5%

2.9%

 

09:30

GBP

Manufacturing Production (MoM) 

-0.6%

3.2%

 

09:30

GBP

Trade Balance 

-8.5B

-7.2B

 

09:30

GBP

Industrial Production (YoY) 

-1.1%

-0.8%

 Oct. 11

07:00

EUR

German CPI (YoY) 

2.0%

2.0%

 

07:45

EUR

French CPI (MoM) 

 

0.7%

Oct. 12 

10:00

EUR

Industrial Production (MoM) 

-0.5%

0.6%

Upcoming Government Bond Auctions

Date Time Country 

Oct 08 09:10 Norway 

Oct 08 15:30 Italy  

Oct 09 08:30 Holland 

Oct 09 09:30 UK 

Oct 09 14:30 UK 

Oct 09 17:00 US 

Oct 10 09:10 Italy  

Oct 10 09:10 Sweden 

Oct 10 09:30 Germany 

Oct 10 09:30 Swiss 

Oct 10 14:30 Sweden 

Oct 10 17:00 US 

Oct 11 09:10 Italy  

Oct 11 09:10 Sweden 

Oct 11 09:30 UK 

Oct 11 15:00 US 

Oct 11 17:00 US 

Oct 12 09:30 Germany 

Oct 12 10:00 Belgium 

 

 

 

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